RGGI States Cut CO2 by 23 Percent in First Three Years

A three-year summary of America's first carbon trading program was released yesterday. The news is pretty good for anyone who cares about reducing carbon emissions; it's inconvenient for anyone hell-bent on preventing America from implementing a carbon pricing plan.

According to the program administrator of the Regional Greenhouse Gas Initiative (RGGI) — a nine-state cap-and-trade market established in the Northeast in 2008 — average annual CO2 emissions have fallen by 23 percent compared to emission levels before the start of the program:

Average annual CO2 emissions for the three-year period were 126 million short tons, a 23 percent reduction when compared to the preceding three-year period, 2006-2008. Three-year average electricity consumption across the ten-state region declined only moderately, by 2.4 percent, between the same periods, according to the U.S. Energy Information Administration.

CO2 emissions were collectively reduced to 33 percent below the annual pollution cap of 188 million short tons.

And the predictions of economic collapse and suffering ratepayers? Not happening.

The progress report follows a study from the Analysis Group finding that RGGI added $1.6 billion in value to the economies of participating states, setting up ratepayers for more than $1.1 billion in savings through improved efficiency and development of renewable energy. All this activity created 16,000 jobs in the first three years of the program.

“Five years ago, critics were saying climate programs like RGGI couldn’t succeed in the U.S.,” said David Littell, Commissioner of the Maine Public Utilities Commission and Vice-Chair of RGGI, in a statement.

“Now, we are seeing significant emissions reductions in the context of economic recovery as we switch to cleaner fuels and learn to use energy smarter. In fact, RGGI has allowed companies to stay competitive and reduce their energy expenditures to weather the recession and come out stronger.”

In April, Environment New Jersey issued an analysis showing that states participating in RGGI reduced emissions 20 percent faster and grew GDP twice the rate of the rest of the U.S. through 2009. However, that report was not a completely accurate picture of the impact of RGGI, as it only took into consideration the first year of the program.

RGGI is a very modest emissions trading market designed to reduce CO2 in the power sector 10% below 1990 levels by the end of 2018. Participating states include: Connecticut, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Rhode Island, and Vermont.

When first implemented with bi-partisan support, administrators assumed it would lower utility CO2 emissions by as much as 35 percent compared to a business-as-usual scenario. However, administrators didn’t foresee such a dramatic drop in emissions so quickly.

The steep decline in utility-sector emissions occurred due to a decline in coal generation, a switch to natural gas, and the economic downturn. An executive at the Massachusetts power company National Grid explained that CO2 was falling because of the “effects of RGGI on top of that.”

The emissions picture is complicated and certainly different than expected in 2008. But the outcome — reduced coal use, lower emissions, and greater deployment of renewables and efficiency — is exactly what was intended.

It’s also the exact opposite of what opponents claimed would happen.

Americans for Prosperity, the Koch-backed group at the forefront of spreading lies about cap and trade, absurdly claimed that RGGI would raise rates by 90%. RGGI’s impact on rates has been so negligible, pulling out the cost “would be like factoring in the cost of mowing the lawn at the power plant or factoring in the property taxes,” explained Seth Kaplan of the Conservation Law Foundation.

And last spring, a bill was introduced in the New Hampshire legislature that would have pulled the state out of RGGI. The legislation copied language from a “model” bill developed by the American Legislative Exchange Council, a “stealth business lobbyist” that helps large corporate interests write laws for a fee.

The ALEC-written language in the bill said that RGGI had “increased consumer costs for electricity, fuel, and food.”

After three years of experience, the data shows that RGGI has played a part in lowering emissions, helped businesses deploy more clean energy, and done so by adding very little upfront costs to ratepayers.

Once again, real world experience proves that absurd doomsday scenarios about cap and trade pushed by pundits and political disinformers are wrong.

10 Comments

paul-passarelli, I have invested (10's of thousands of my dollars) and installed a roof mounted 9kW solar array (2+ years ago) that provides me with 120% of my homes electricity...the extra 20% of which will provide me with 10,000 miles annually of electric driving (I now have oil independence and know I am not contributing to the greed and killing that go along with oil) and yes there were PV subsidies...much much smaller than what the oil co.s receive. Shouldn't we have a level subsidy playing field? Let's get rid of all subsidies, or at least, share them on an equal percentage and help people...that way some of the Elderly and other low income people could then take advantage of solar gardens (community solar would then be investor friendly to install due to better incentives) that would offer a fixed cost per kWh at less than today's rates and the kWh cost would remain flat over the next 25 years...you could even donate modules to someone to help them out. Your electric co. will not keep your kWh cost flat for 25 years, hence the continued rise in electric retail prices even if it's just to cover their cost of living index. Now, if your not behind fossil fuels, can we start offering solutions versus arguing and badgering an article that is trying to bring to light positive news. We all should be thinking...how can we fix current problems so they are not given to our kids and grand kids...if we are not doing this then in my eyes it shows selfishness.

@tim-gulden, Re-read the 1st comment by anonymous(Steven). I live in the RGGI, and the "success" of the reduction has been paid for by double decimating many sectors of the economy -- not the "greed" of the fossil fuel sector! People who are strapped for cash DO NOT have the luxury of ignoring the retail price signals. BTW it you are as financially flush as implied by your ability to pay *OVER* retail for yout energy, then I have to ask you to consider investing in a Solar & Thermal Systems. Inc. (S&T) CSP-genset for your facility... If you're going to chastise the markets & blame it on greed, then you should be prepared to put your money where your mouth is, or face being called a hypocrite, or worse... The Light is Green!

Natural gas price fell dramatically during the 2009-2011 period compared to the 2006-2008 period, resulting in the bulk of of the impacts when combined with new combined cycle power plants 30% more efficient than previous technology. In addition, the power supply balance of both Ontario and Quebec changed significantly, and those provinces now export far more power into the RGGI states compared to the 2006-2008 period, resulting in reduced RGGI emissions. If RGGI were the reason for the CO2 reductions, then the RGGI allowance auction price would not be continuously clearing at the floor price. Meanwhile, many non-RGGI states have seen similar reductions in CO2 emissions from electric power. Virginia's CO2 emissions in 2009 were 18% lower than the 2006-2008 period, according to EPA data.

Question -- Were the CO2 reductions the actual CO2 reductions in the region of the RGGI, or did the participants have the ability to buy Renewable Energy Credits (RECs) from non-participating states and claim these as CO2 reductions? The reason I ask is that I heard that our local utility here in Arizona has been selling their RECs from their large solar projects to utilities back East.

Good work! and that was just by trimming around the edges. Far more serious reductions can be accomplished with only slightly more effort and Futura Solar has a tool by which to accomplish the purpose while enabling businesses to continue to be productive. Along with DCM-A&E of NJ, Futura Solar is offering its Sawtooth Solar Daylighter, a multiple solar benefit roofing system for low profile commercial buildings. In addition to daylighting, this revival of old fashioned sawtooth roofing offers solar thermal air (with incidental air handling, space conditioning and heat recovery) and still has room for PV, SWH or PV/Thermal, as specified. That represents a significant portion of a commercial building's energy consumption. Every building standing today is a solar collector anyway. Now you can harvest the Utility of that solar power for routine use.

ANONYMOUS
June 8, 2012

The shift from coal to natural gas generation would have occurred even in the absence of the program. The same can be said for most of the other contributing factors such as the decreased industrial production, warmer than usual winters, decreased vehicle use (due in part to higher gasoline prices) etc. Claiming that the RGGI is a success is like a crowing rooster taking credit for the dawn. Steven

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I am a reporter with ClimateProgress.org, a blog published by the Center for American Progress. I am former editor and producer for RenewableEnergyWorld.com, where I contributed stories and hosted the Inside Renewable Energy Podcast. Keep...